Welspun India Ltd. (WIL) will continue to leverage its scale to emerge as one of the world’s most efficient manufacturers of home textiles. In FY 2018, the company plans to expand its towel capacity from 72,000 MT to 80,000 MT. It will also invest in the new flooring facility during the year. The total capex for 2017-18 is around Rs. 7 billion.
Welspun is known as one of the most innovative companies in the home textile space, with a portfolio of 26 unique inventions across the globe, contributing 36% to its sales. The recent innovation ‘Hygrocotton’ has crossed the $200 million mark, contributing to approximately 20% of the total revenues.
The company also secured the ‘Interactive Textile Article and Augmented Reality System’ patent for its new product line in the smart textile category, viz., ‘Spintales’. It has also been able to create an ecosystem comprising universities, technology partners and industry associations to continuously develop new products and processes.
Welspun’s next growth engine is flooring solutions wherein it is investing Rs. 6 billion over the two years. The products include area rugs, carpets, carpet tiles, accent rugs and wall to wall carpets.
Wel-Trak
WIL has been ideating and creating procedures that will help the company fortify its position as a ‘market leader’. The outcome has been the conceptualisation of Welspun 2.0. With Welspun 2.0 values at the core of its business strategy, the company aims to create customer delight through innovative offerings and build a robust and inclusive business, a business which empowers and creates sustained value for all its stakeholders.
Mr. Balkrishan Goenka, Chairman, Welspun Group, says: “Apart from the macro-economic issues, the year gone by also presented us with supply chain challenges. In order to align our supply chain with our growing magnitude, we have put in place an industry-defining, multi-level traceability system called ‘Wel-Trak’ which can trace back a finished product to its original source of raw material. Streamlining our supply chain, this cutting-edge traceability process allows tracking cotton from the farm to the store shelf using a combination of RFID, barcodes and QR Code Scanners integrated with ERP Systems”.
Wel-Trak has been one of Welspun’s most successful executions for strengthening of its supply chain on the structural, technological and the process fronts, that too in a record time of four months. It is a state-of-the-art solution that has raised the bar for the industry.
Welspun’s capacity utilisation for towels is almost at 97% now, and the Board has announced an expansion of 10,000 metric tonnes for towels. The company would be investing about Rs. 700 crores in capex during FY’18. The capacity for Welspun flooring solutions project is about 7 million square metres that will require an investment of Rs. 600 crores over the next 15 months and is expected to be completed by the second quarter of fiscal 2019.
Further, Welspun has invested Rs. 100 crores to set up a fresh state-of-the-art fully automated cut and sew unit in the made-ups segment with a capacity of 10 million units per annum. The new initiatives are a testimony to Welspun’s commitment to enhancing employment opportunities in the region, particularly for the women workforce.
Vision 2022
Mr. Goenka says: “We remain fully committed to our Vision 2020 which we announced last year. Recent operational headwinds have put some pressure on the timelines for achieving these targets, and hence we have decided to rechristen our vision as ‘Vision 2022’. To meet our target of $2 billion in revenue, we are focusing on new markets such as India, Europe, Japan, etc., new channels such as e-commerce and hospitality, and new products such as flooring solutions and advanced textiles. For achieving zero net debt, we are focusing on improving our free cash flows by rationalising capex through ancillarisation and optimising working capital”.
The Chairman further observes: “We plan to achieve 20% of its revenues from the domestic market. The reform measures by the Government will open up significant opportunities for us and our flooring solutions will add to the potential. We aim to achieve a revenue share of 50% from innovative and branded products. We hold 26 patents and plan to commercialise some of these over the next few years. We also plan to take ‘Christy’ global and increase penetration of ‘Spaces’ in India, apart from leveraging our licences. Our women employee strength is at 17% which we intend to raise to 20% in the near future”.